Your business has a lot to gain when you issue credit cards to employees. Purchasing becomes quicker and easier, expense tracking improves, and rewards add up.
To keep your credit card program running smoothly, it’s important to put guidelines in writing. When employees know the rules, there will be fewer misunderstandings and you’ll reap the benefits of more efficient financial management.
The following three components are key to a sound company credit card program.
Draft a document that lays out the ground rules for using the card and includes the acknowledgement that the employee takes responsibility for the card and agrees to follow the guidelines. This should also address issues such as:
Consider asking your attorney to review this written agreement to be sure it complies with any applicable laws.
Besides stating explicitly that the card should not be used for personal spending, list acceptable expenses. These will likely fall into two broad categories:
Spell out guidelines for particular types of expenses. You might set a dollar limit on meals and hotel costs, or stipulate that employees book airline seats in economy class. You may decide that spending on office supplies or services should stay under a certain level. Valid exceptions to these rules will inevitably come up, so build in flexibility by describing a simple process for seeking advance approval of out-of-policy spending.
Your consolidated business credit card statements provide an overview of spending, but employees should still submit individual expense reports with information and accompanying documents that substantiate expenses.
Your guidelines for expense reporting should include:
With a solid policy and guidelines in place, you can more confidently issue business credit cards to your employees and reap the benefits of using this flexible payment tool.
We are committed to helping your business succeed. Our dedicated business banking professionals can help you find the right product to meet your business’ needs. To learn more about business credit cards, please call 1-866-248-4936, visit us online, or visit your nearest Citizens Bank Branch.
Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.